There is no problem with your CPU, and your hard drive is plenty big.  But, how much FREE space is there on your hard drive?

Your main problem is insufficient RAM memory.  512 MB is enough to run Windows XP and an office type program, but it is not enough to run a resource intensive program like MMM.

On my computer, Windows XP (SP3) and the Norton's AV and Internet Security uses approximately 350 MB alone.

Opening MM-15, it goes up to 484 MB used.  If I had 512 MB of RAM, that would leave a measly 28 MB for MM-15 to use to process your sound files.  That's almost nothing, and explains why your CPU is maxed out.

It would be best for you to increase your RAM memory to at least 1 GB if not more.  This would be at least double what you have now.

You should also make sure you have the latest drivers for your sound and video cards, and that your paging file is set to at least 512 MB.  If you increase your RAM, the paging file should be at least as large.  The paging file provides a place on the hard drive for the RAM to dump information to allow it to work most efficiently.

If you do all of this and still have a problem, you should adjust the buffer in MMM.  You could try this first, but I doubt it would help much under the circumstances.

Good.  I think you will find your computer will function better all around with the increase in RAM memory.

As far as the buffers are concerned, this is what the HELP files says:

As a rule of thumb: If response and loading times are too slow, reduce the buffer size; otherwise increase the buffer size if the audio playback is choppy or if real-time effect computation errors occur. As error-free playback is usually more important than fast reaction times, the buffer size should be raised to 16384 or 32768 if dropouts occur.

It's always a good idea to make sure you have the most up-to-date drivers installed for your video and sound cards.  Especially if they are a few years old or older.  The latest drivers can usually be downloaded from the manufacturer's website.  Make sure you download the correct driver for your video/sound cards, your operating system (Windows/Apple version), and the bit rate of your computer (32 bit for an older model, 64 bit for some newer models).

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On a PC with Windows XP, there are two ways to find the system information.

One place is in the Device Manager. Go to the Start menu if you don't have the "My Computer" icon on your desktop.

(Start) My Computer (right click) > System Properties (dialog box) > Hardware (tab) > Device Manager >

You will find your video card info here...Display Adapters
You will find your sound card info here...Sound, video and game controllers

Right-click and choose Properties for more information

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The second method is to go to System Information...

Start > All Programs > Accessories > System Tools > System Information >

System Summary (Processor/CPU, Total Physical Memory/RAM)

Components > Sound Device
Note sound card make and model, Driver Version

Components > Display
Note video card make and model,  (Video) Adapter RAM, Driver Version